US persons with ownership interests in foreign corporations or who are directors or officers of foreign corporations are subject to special reporting rules. The first article of this series provided the general reporting requirements under Form 5471. This article will focus on the reporting requirements of “Category 2 Filers”, which are the reporting requirements of…

Thanksgiving was quite a feast for the US Treasury Department. On November 26, 2013, the US and Costa Rica signed a bilateral agreement to implement the Foreign Account Tax Compliance Act (FATCA) and on November 28, 2013, the US and the Cayman Islands signed a bilateral agreement to implement FATCA. The Costa Rican agreement is…

US TAX SURPRISES AND REPORTING REQUIREMENTS SERIES Here we will briefly discuss the ownership attribution rules for purposes of Form 5471, and introduce the different filing categories under Form 5471. The rules and reporting requirements for each category of filer are unique and will be discussed in more detail in subsequent articles. Before describing the…

US TAX SURPRISES AND REPORTING REQUIREMENTS SERIES If you are a US person (citizen or resident) you may have learned by now that you have to file a US tax return and bank report each year, even if you have no US source income. Well, that’s not all. This is the first in a series…

On November, 14 2013, the US and France signed a bilateral agreement to implement the Foreign Account Tax Compliance Act (FATCA). The agreement is based on the Model 1A treaty and requires French financial institutions to report US account holders to the French government, which will then report those accounts to the US. Similarly, US financial institutions are required…

Flott & Co. recently had the opportunity to discuss our proposal for changes to the existing IRS “noisy” disclosure programs (Offshore Voluntary Disclosure Program – OVDP – and the Streamlined Filing Compliance Procedure for Non-Resident US Taxpayers – Streamlined Process) with representatives of the Service. The discussion focused on encouraging the IRS to create a…

Our suggestion for a new compliance procedure for non-resident, dual national, delinquent us taxpayers is as follows: This compliance procedure is only available to US persons who are also nationals of another country and (1) have resided continuously outside the United States for more than ten years as of January 1, 2013 and continue to…

DEAR MR. HORTON: The Service’s approach to tax and FBAR compliance by US citizens who are dual nationals and long-term residents of other countries needs to change. The existing compliance programs do not reflect the demonstrable reality that there are many genuinely innocent delinquent US taxpayers living overseas. Enclosed with this letter is a proposal…

On July 12, 2013, the US Treasury Department issued Notice 2013-43 which extended the implementation deadline of most FATCA rules for an additional six months. This has moved the general implementation deadline for FATCA from January 1, 2014 to July 1, 2014. Still, US persons holding foreign accounts will be impacted by FATCA sooner rather…

The IRS applies different methodologies for calculating the gambling winnings of US taxpayers and Nonresident Aliens (NRAs). For US taxpayers, the IRS calculates earnings based on winnings over the course of a gambling session, while for NRAs the IRS has taken the position that gambling winnings should be calculated based on each bet. So, for…